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I believe most people understand the difference between donating money to a "good cause" and making a tax-deductible donation to a registered charity. Making it difficult for an honest person to collect donations and forward the proceeds to the needy (where the donors have no expectation of any tangible good in return), or forcing Boy Scouts to obtain a peddler's license to collect canned foods for a food bank, is socially harmful.

As far as I know, Paypal has no legal or even formally self-elected responsibility to enforce that "donate" buttons are used only in the context of a registered charitable organization, or to play cop for the calculation, collection, and remittance of federal, state, local, or international taxes and tariffs, etc., etc. Paypal does not even have any way of determining what is taxable and at what rate--it is so thoroughly beyond their purview that I don't know why we're discussing it.

"Paypal has no legal or even formally self-elected responsibility ... "

Paypal may or may not have any legal responsibility there, it makes no difference.

I think a lot of people overlook the underlying business model of Paypal. They're betting they can do a better job of fraud prevention than the entrenched credit card processing industry, and by doing so they can offer credit card facilities to more (read "higher risk") people.

What that means is that if you do _anything_ that might be even tangentially related to things that look like credit card fraud, you're opening yourself up to all the well documented risks of having them stop you withdrawing money from your account for 180 days.

If you're doing anything other than delivering physical goods to credit card billing addresses via 3rd party trackable shipping, you need to make sure you're fully aware of the risks you're choosing to expose yourself to using Paypal. If you're using Paypal for donations, preorders, digital goods, downloads, conferences, consulting - anything where you can't give them a FedEx tracking number (or equivalent), you're opening yourself up to a world of hurt in the dispute resolution process.

Surely I'm not the only one who looks at almost all of these Paypal "horror stories" and thinks "Yep, I could have told them they had that coming."?

One interesting question will be what impact the re-organization of financial services regulation enforcement has long-term over Paypal. I know I have heard anytime your account is frozen write a letter to the Office of the Comptroller of Currency at the US Treasury Department and CC the CEO of Paypal to get traction........

forcing Girl Scouts to obtain a peddler's license to collect canned foods for a food bank

As an aside, most of those laws were put in to use against the lower class people who were begging. They have recently (thankful) started to be applied in a non-discriminatory fashion (i.e. to rich kids aswell as drug addicted adults), and this is the consequence.

The EU PayPal is regulated as a bank in Luxembourg, they will have a very large number of responsibilities.

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